Current Report Filing (8-k)
March 21 2018 - 4:47PM
Edgar (US Regulatory)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report
(Date
of earliest event reported)
:
March 21, 2018
VILLAGE
BANK AND TRUST FINANCIAL CORP.
(Exact Name of Registrant as Specified in
Charter)
Virginia
(State or Other Jurisdiction
of Incorporation)
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0-50765
(Commission File Number)
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16-1694602
(IRS Employer
Identification No.)
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13319 Midlothian Turnpike
Midlothian, Virginia
(Address of Principal Executive Offices)
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23113
(Zip Code)
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Registrant’s Telephone Number, Including
Area Code:
(804) 897-3900
Not Applicable
(Former Name or Former Address, if Changed
Since Last Report)
Check the appropriate box below if the
Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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o
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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o
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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o
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Pre-commencement communications pursuant
to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant
to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Indicate by check mark whether the registrant
is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the
Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging
growth company
o
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
o
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Item 1.01
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Entry into a Material Definitive Agreement.
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On March 21, 2018,
Village Bank and Trust Financial Corp. (the “Company”) entered into a Subordinated Note Purchase Agreement (the “Purchase
Agreement”) with 10 accredited investors under which the Company issued an aggregate of $5.7 million of fixed-to-floating
rate subordinated notes due March 31, 2028 (the “Notes”) in a private placement. The Company expects to receive approximately
$5.525 million in net proceeds after deducting issuance costs.
The Notes accrue interest
at a fixed interest rate of 6.50% per year for the first five years of their term. For the remaining five years of their term,
the Notes bear interest at a floating rate of three-month LIBOR plus 3.73%. The Notes are not convertible into common stock or
preferred stock, and are not callable by the holders. The Company has the right to redeem the Notes, in whole or in part, without
premium or penalty, at any time on or after March 21, 2023, with certain exceptions provided in the Notes that allow the Company
to redeem the Notes prior to that date.
If an event of default
occurs, such as the bankruptcy of the Company, the holder of a Note may declare the principal amount of the Note to be due and
immediately payable. The Notes are unsecured obligations subordinate and junior in right of payment to all of the Company’s
existing and future senior indebtedness, whether secured or unsecured, including claims of depositors and general creditors, and
rank equally in right of payment with any unsecured, subordinated indebtedness that the Company may incur in the future that rank
equally with the Notes.
The Notes are intended
to qualify as Tier 2 capital for regulatory purposes. The Company expects to use the net proceeds from the sale of the Notes to
redeem all of the Company’s 5,027 outstanding shares of Fixed Rate Cumulative Perpetual Preferred Stock, Series A on March
30, 2018, and for general corporate purposes.
The Notes were offered
and sold in reliance on the exemptions from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended,
and Rule 506(b) of Regulation D promulgated thereunder. Accordingly, the Notes were offered and sold exclusively to persons who
are “accredited investors” within the meaning of Rule 501(a) of Regulation D.
The foregoing descriptions
of the Purchase Agreement and the Notes do not purport to be complete and are qualified in their entirety by reference to the forms
of the Purchase Agreement and the Notes which are attached hereto as Exhibits 10.1 and 4.1, respectively, and are incorporated
herein by reference.
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Item 2.03
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Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement
of a Registrant.
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The information
set forth under Item 1.01 above is incorporated by reference into this Item 2.03.
On March 21, 2018,
the Company issued a press release regarding the offering of Notes. A copy of the press release is attached hereto as Exhibit 99.1
and is incorporated herein by reference.
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Item 9.01
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Financial Statements and Exhibits.
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(d) Exhibits.
SIGNATURES
Pursuant to the requirements
of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
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VILLAGE BANK AND TRUST FINANCIAL CORP.
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(Registrant)
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Date: March 21, 2018
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By:
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/s/ C. Harril Whitehurst, Jr.
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C. Harril Whitehurst, Jr.
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Executive Vice President and CFO
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